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LOANS (Tables)
 9 Months Ended
Sep. 30, 2020
Receivables [Abstract]  
Schedule of Loans
Loans as of September 30, 2020, and December 31, 2019, were as follows, in thousands:

September 30, 2020December 31, 2019
Loans receivable held to maturity:  
Commercial and industrial$2,303,646 $2,530,809 
Paycheck Protection Program ("PPP")1,128,035 — 
Owner occupied commercial real estate1,494,902 1,472,704 
Non-owner occupied commercial real estate1,659,683 1,495,877 
Real estate construction917,765 1,027,081 
Agricultural and agricultural real estate508,058 565,837 
Residential real estate701,899 832,277 
Consumer385,658 443,332 
Total loans receivable held to maturity9,099,646 8,367,917 
Allowance for credit losses(103,377)(70,395)
Loans receivable, net$8,996,269 $8,297,522 
Allowance for Loan and Lease Losses, Based on Impairment Methodology
The following table shows the balance in the allowance for credit losses at September 30, 2020, and December 31, 2019, and the related loan balances, disaggregated on the basis of measurement methodology, in thousands. As of September 30, 2020, loans individually assessed are collateral dependent and in the process of foreclosure or no longer share the same risk characteristics of the other loans in the pool. All other loans are collectively evaluated for losses. Loans individually evaluated were considered impaired at December 31, 2019.

Allowance For Credit LossesGross Loans Receivable Held to Maturity
Individually Evaluated for Credit LossesCollectively Evaluated for Credit LossesTotalLoans Individually Evaluated for Credit LossesLoans Collectively Evaluated for Credit Losses Total
September 30, 2020
Commercial and industrial$5,745 $28,853 $34,598 $19,420 $2,284,226 $2,303,646 
PPP — — — — 1,128,035 1,128,035 
Owner occupied commercial real estate263 10,966 11,229 11,833 1,483,069 1,494,902 
Non-owner occupied commercial real estate— 12,127 12,127 3,644 1,656,039 1,659,683 
Real estate construction74 20,713 20,787 1,284 916,481 917,765 
Agricultural and agricultural real estate1,847 3,494 5,341 17,906 490,152 508,058 
Residential real estate135 9,536 9,671 4,661 697,238 701,899 
Consumer383 9,241 9,624 1,168 384,490 385,658 
Total$8,447 $94,930 $103,377 $59,916 $9,039,730 $9,099,646 
Allowance For Credit LossesGross Loans Receivable Held to Maturity
Individually Evaluated for Credit LossesCollectively Evaluated for Credit LossesTotalLoans Individually Evaluated for Credit LossesLoans Collectively Evaluated for Credit Losses Total
December 31, 2019
Commercial and industrial$6,276 $24,511 $30,787 $31,814 $2,498,995 $2,530,809 
Owner occupied commercial real estate351 7,863 8,214 9,468 1,463,236 1,472,704 
Non-owner occupied commercial real estate33 7,769 7,802 1,730 1,494,147 1,495,877 
Real estate construction— 11,599 11,599 685 1,026,396 1,027,081 
Agricultural and agricultural real estate916 4,757 5,673 18,554 547,283 565,837 
Residential real estate176 1,328 1,504 20,678 811,599 832,277 
Consumer419 4,397 4,816 4,123 439,209 443,332 
Total$8,171 $62,224 $70,395 $87,052 $8,280,865 $8,367,917 
Schedule of Financing Receivables, Non Accrual Status
The following tables present the amortized cost basis for loans on nonaccrual status and accruing loans past due 90 days or more at September 30, 2020, in thousands:

Nonaccrual
Loans with an
Allowance for
Credit Losses		Nonaccrual Loans
with No Allowance
for Credit Losses		Total
Nonaccrual
Loans		Accruing Loans
Past Due 90+ Days
September 30, 2020
Commercial and industrial$10,654 $10,732 $21,386 $431 
Owner occupied commercial real estate1,651 11,41313,064 — 
Non-owner occupied commercial real estate— 3,6443,644 — 
Real estate construction751 9021,653 — 
Agricultural and agricultural real estate10,714 7,86118,575 — 
Residential mortgage8,237 8,28916,526 1,250 
Consumer 3,569 6234,192 — 
Total$35,576 $43,464 $79,040 $1,681 

Heartland recognized $0 of interest income on nonaccrual loans during the three- and nine months ended September 30, 2020.

Heartland had $15.9 million of troubled debt restructured loans at September 30, 2020, of which $4.1 million were classified as nonaccrual and $11.8 million were accruing according to the restructured terms. Heartland had $7.6 million of troubled debt
restructured loans at December 31, 2019, of which $3.8 million were classified as nonaccrual and $3.8 million were accruing according to the restructured terms.
Troubled Debt Restructuring on Loans Modified
The following tables provide information on troubled debt restructured loans that were modified during the three- and nine-month periods ended September 30, 2020, and September 30, 2019, dollars in thousands:

Three Months Ended
September 30,
20202019
Number
of Loans		Pre-
Modification
Recorded
Investment		Post-
Modification
Recorded
Investment		Number
of Loans		Pre-
Modification
Recorded
Investment		Post-
Modification
Recorded
Investment
Commercial1 $20 $20 — $— $— 
PPP — — —— — —
Owner occupied commercial real estate— — —— — —
Non-owner occupied commercial real estate1 9,434 9,434— — —
Real estate construction— — —— — —
Agricultural and agricultural real estate— — —— — —
Residential real estate— — —— — —
Consumer— — —— — —
Total2 $9,454 $9,454 — $— $— 

Nine Months Ended
September 30,
20202019
Number
of Loans		Pre-
Modification
Recorded
Investment		Post-
Modification
Recorded
Investment		Number
of Loans		Pre-
Modification
Recorded
Investment		Post-
Modification
Recorded
Investment
Commercial and industrial1 $20 $20 — $— $— 
PPP— — — — — — 
Owner occupied commercial real estate— — — — — — 
Non-owner occupied commercial real estate1 9,434 9,434 — — — 
Real estate construction— — — — — — 
Agricultural and agricultural real estate— — — — — — 
Residential real estate2 92 98 4 276 288 
Consumer— — — — — — 
Total4 $9,546 $9,552 4 $276 $288 
Troubled Debt Restructuring on Loans With Payment Defaults
The following table shows troubled debt restructured loans for which there was a payment default during the three- and nine--month periods ended September 30, 2020, and September 30, 2019, that had been modified during the twelve-month period prior to default, in thousands:

With Payment Defaults During the
Three Months Ended
September 30,
20202019
Number of LoansRecorded InvestmentNumber of LoansRecorded Investment
Commercial and industrial— $— — $— 
PPP — — — — 
Owner occupied commercial real estate— — — — 
Non-owner occupied commercial real estate— — — — 
Real estate construction— — — — 
Agricultural and agricultural real estate— — — — 
Residential real estate— — — — 
Consumer— — — — 
Total— $— — $— 

With Payment Defaults During the
Nine Months Ended
September 30,
20202019
Number of LoansRecorded InvestmentNumber of LoansRecorded Investment
Commercial and industrial— $— — $— 
 PPP — — — — 
Owner occupied commercial real estate— — — — 
Non-owner occupied commercial real estate— — — — 
Real estate construction— — — — 
Agricultural and agricultural real estate— — — — 
Residential real estate1 236 3 253 
Consumer— — — — 
Total1 $236 3 $253 
Schedule of Financing Receivable Credit Quality Indicators
The following table summarizes, in thousands, the carrying amount of Heartland's held to maturity debt securities by investment rating as of September 30, 2020, which are updated quarterly and used to monitor the credit quality of the securities:
RatingObligations of states and political subdivisions
AAA$— 
AA, AA+, AA-27,465 
A+, A, A-10,451 
BBB— 
Not Rated50,845 
Total $88,761 
The following table shows the risk category of loans by loan category and year of origination as of September 30, 2020, in thousands:

Amortized Cost Basis of Term Loans by Year of Origination
202020192018201720162015 and PriorRevolvingTotal
Commercial and industrial
Pass$363,812 $355,625 $181,366 $229,869 $118,285 $348,709 $480,474 $2,078,140 
Watch 32,475 21,178 17,393 17,268 6,597 2,381 35,073 132,365 
Substandard 3,996 8,303 21,543 17,789 10,748 14,478 16,284 93,141 
Commercial and industrial total$400,283 $385,106 $220,302 $264,926 $135,630 $365,568 $531,831 $2,303,646 
PPP
Pass$1,063,169 $— $— $— $— $— $— $1,063,169 
Watch34,691 — — — — — — 34,691 
Substandard30,175 — — — — — — 30,175 
PPP total $1,128,035 $— $— $— $— $— $— $1,128,035 
Owner occupied commercial real estate
Pass$226,358 $313,472 $286,767 $165,497 $111,839 $227,090 $32,287 $1,363,310 
Watch8,449 7,692 10,430 19,836 6,255 9,276 2,245 64,183 
Substandard8,923 6,506 14,875 12,576 9,318 14,949 262 67,409 
Owner occupied commercial real estate total$243,730 $327,670 $312,072 $197,909 $127,412 $251,315 $34,794 $1,494,902 
Non-owner occupied commercial real estate
Pass$256,678 $411,467 $252,071 $193,575 $105,474 $253,755 $26,598 $1,499,618 
Watch14,535 9,949 14,788 20,394 7,648 18,171 475 85,960 
Substandard25,671 4,280 19,889 15,737 3,636 4,892 — 74,105 
Non-owner occupied commercial real estate total$296,884 $425,696 $286,748 $229,706 $116,758 $276,818 $27,073 $1,659,683 
Real estate construction
Pass$188,216 $351,522 $235,386 $34,641 $14,609 $23,189 $16,716 $864,279 
Watch 2,874 24,153 5,931 280 14,744 791 637 49,410 
Substandard199 2,018 353 686 394 426 — 4,076 
Real estate construction total$191,289 $377,693 $241,670 $35,607 $29,747 $24,406 $17,353 $917,765 
Agricultural and agricultural real estate
Pass$86,754 $76,196 $45,596 $29,713 $15,357 $33,322 $114,403 $401,341 
Watch4,527 9,475 5,127 826 1,772 3,651 9,175 34,553 
Substandard14,563 4,914 18,457 6,419 3,799 12,762 11,250 72,164 
Agricultural and agricultural real estate total$105,844 $90,585 $69,180 $36,958 $20,928 $49,735 $134,828 $508,058 
Amortized Cost Basis of Term Loans by Year of Origination
202020192018201720162015 and PriorRevolvingTotal
Residential real estate
Pass$81,558 $72,198 $101,789 $78,394 $51,293 $250,936 $30,370 $666,538 
Watch81 3,462 825 1,402 338 5,844 346 12,298 
Substandard848 312 1,152 860 1,500 17,291 1,100 23,063 
Residential real estate total $82,487 $75,972 $103,766 $80,656 $53,131 $274,071 $31,816 $701,899 
Consumer
Pass$24,864 $26,236 $18,451 $14,001 $3,955 $20,208 $265,699 $373,414 
Watch8 370 599 235 236 754 2,218 4,420 
Substandard487 696 2,234 652 762 2,152 841 7,824 
Consumer total$25,359 $27,302 $21,284 $14,888 $4,953 $23,114 $268,758 $385,658 
Total Pass$2,291,409 $1,606,716 $1,121,426 $745,690 $420,812 $1,157,209 $966,547 $8,309,809 
Total Watch97,640 76,279 55,093 60,241 37,590 40,868 50,169 417,880 
Total Substandard 84,862 27,029 78,503 54,719 30,157 66,950 29,737 371,957 
Total Loans$2,473,911 $1,710,024 $1,255,022 $860,650 $488,559 $1,265,027 $1,046,453 $9,099,646 
The following table shows Heartland's loan portfolio by credit quality indicator as of December 31, 2019, in thousands:

PassNonpassTotal
Commercial and industrial$2,352,131 $178,678 $2,530,809 
Owner occupied commercial real estate1,369,290 103,414 1,472,704 
Non-owner occupied commercial real estate1,429,760 66,117 1,495,877 
Real estate construction984,736 42,345 1,027,081 
Agricultural and agricultural real estate454,272 111,565 565,837 
Residential real estate790,226 42,051 832,277 
Consumer430,733 12,599 443,332 
  Total loans receivable held to maturity$7,811,148 $556,769 $8,367,917 
Past Due Financing Receivables
The following table sets forth information regarding Heartland's accruing and nonaccrual loans at September 30, 2020, and December 31, 2019, in thousands:

Accruing Loans
30-59 Days
Past Due		60-89 Days
Past Due		90 Days or
More
Past Due		Total
Past Due		CurrentNonaccrualTotal Loans
September 30, 2020
Commercial and industrial$3,200 $2,293 $431 $5,924 $2,276,336 $21,386 $2,303,646 
PPP— — — — 1,128,035 — 1,128,035 
Owner occupied commercial real estate1,052 896 — 1,948 1,479,890 13,064 1,494,902 
Non-owner occupied commercial real estate863 1,685 — 2,548 1,653,491 3,644 1,659,683 
Real estate construction310 597 — 907 915,205 1,653 917,765 
Agricultural and agricultural real estate1,308 — — 1,308 488,175 18,575 508,058 
Residential real estate1,820 86 1,250 3,156 682,217 16,526 701,899 
Consumer980 46 — 1,026 380,440 4,192 385,658 
Total gross loans receivable held to maturity$9,533 $5,603 $1,681 $16,817 $9,003,789 $79,040 $9,099,646 
December 31, 2019
Commercial and industrial$5,121 $904 $3,899 $9,924 $2,491,110 $29,775 $2,530,809 
Owner occupied commercial real estate3,487 690 — 4,177 1,461,589 6,938 1,472,704 
Non-owner occupied commercial real estate614 81 — 695 1,493,619 1,563 1,495,877 
Real estate construction5,689 72 — 5,761 1,020,153 1,167 1,027,081 
Agricultural and agricultural real estate3,734 79 26 3,839 541,455 20,543 565,837 
Residential real estate4,166 24 180 4,370 814,840 13,067 832,277 
Consumer2,511 651 — 3,162 436,675 3,495 443,332 
Total gross loans receivable held to maturity$25,322 $2,501 $4,105 $31,928 $8,259,441 $76,548 $8,367,917 
Summary of Impaired Loans The following table presents the unpaid principal balance that was contractually due at December 31, 2019, the outstanding loan balance recorded on the consolidated balance sheet at December 31, 2019, any related allowance recorded for those loans as of December 31, 2019, the
average outstanding loan balances recorded on the consolidated balance sheet during the year ended December 31, 2019, and the interest income recognized on the impaired loans during the year ended December 31, 2019, in thousands:

Unpaid
Principal
Balance		Loan
Balance		Related
Allowance
Recorded		Year-to-
Date
Avg.
Loan
Balance		Year-to-
Date
Interest
Income
Recognized
December 31, 2019
Impaired loans with a related allowance:
Commercial$11,727 $11,710 $6,276 $11,757 $6 
Owner occupied commercial real estate712 712 352 1,435 22 
Non-owner occupied commercial real estate138 138 33 — — 
Real estate construction17 17 — — — 
Agricultural and agricultural real estate2,751 2,237 916 2,739 — 
Residential real estate1,378 1,378 176 1,116 — 
Consumer998 997 419 1,170 11 
Total loans held to maturity$17,721 $17,189 $8,172 $18,217 $39 
Impaired loans without a related allowance:
Commercial$22,525 $20,104 $— $19,141 $782 
Owner occupied commercial real estate8,756 8,756 — 8,337 341 
Non-owner occupied commercial real estate1,592 1,592 — 1,515 62 
Real estate construction 668 668 — 636 26 
Agricultural and agricultural real estate19,113 16,317 — 16,837 60 
Residential real estate19,382 19,300 — 17,073 280 
Consumer3,135 3,126 — 4,182 45 
Total loans held to maturity$75,171 $69,863 $— $67,721 $1,596 
Total impaired loans held to maturity:
Commercial$34,252 $31,814 $6,276 $30,898 $788 
Owner occupied commercial real estate9,468 9,468 352 9,772 363 
Non-owner occupied commercial real estate1,730 1,730 33 1,515 62 
Real estate construction 685 685 — 636 26 
Agricultural and agricultural real estate21,864 18,554 916 19,576 60 
Residential real estate20,760 20,678 176 18,189 280 
Consumer4,133 4,123 419 5,352 56 
Total impaired loans held to maturity$92,892 $87,052 $8,172 $85,938 $1,635